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After joining the Alliance AutoGas Network just six months ago, Crystal Flash Energy in Grand Rapids has secured its first three fleet customers.

The fuel distribution company has been working with Flint Mass Transportation Authority, Charlotte Public Schools and Reed City Area Public Schools to supply their vans and buses with autogas, a liquefied form of propane said to be nearly as efficient and powerful as gasoline or diesel but with virtually no exhaust emissions — and at a much lower cost per gallon.

Dave Scigliano, COO at Crystal Flash, said last week the price of propane for vehicles was running at about $1.79 per gallon.

Diesel fuel still far outsells propane as fuel for truck and bus fleets, but propane “is ramping up almost every day,” said Scigliano.

Businesses with automobile fleets that rack up a lot of miles, such as cab companies or police departments, also can save “significant dollars” in fuel cost, according to Scigliano, although the cost to convert an automobile engine to run on autogas ranges from $5,000 to $6,000. Scigliano said many automobile fleets could recover that cost in two or three years, depending on the miles driven.

The largest of Crystal Flash’s new fleet customers is the Flint MTA, which is bringing 60 new propane-powered vans into service June 15 on its way to building a fleet of 92 within the next year. Reed City schools in Osceola County has purchased and put into service six new propane buses, while Charlotte has replaced five of its old diesel school buses with new propane vehicles.

According to Crystal Flash, the propane-powered vehicles provide a quieter ride, cost less to run and require less maintenance because the fuel burns so cleanly. They also get up to speed faster than their diesel counterparts and boast a faster take-off after stopping.

“Autogas is a smart choice for many light-duty vehicles from both a financial and environmental perspective,” said Crystal Flash President Tom Fehsenfeld.

According to Crystal Flash, autogas is cheaper to produce and easier to supply than ethanol, biodiesel and other alternative fuels.

Crystal Flash said the cost to build an autogas refueling station is about one-fifteenth the cost of building a station for compressed natural gas, or CNG.

Scigliano said the Crystal Flash gas station on Alpine Avenue near its corporate headquarters is adding an autogas pump.

Crystal Flash, which distributes vehicle and home-heating fuels throughout much of the Lower Peninsula, announced in January it had become the exclusive Michigan dealer for Alliance AutoGas, which is active throughout North America and based in Asheville, N.C.

Alliance markets liquefied petroleum gas for vehicles, also known as liquid propane or autogas, which Alliance says has been growing in popularity in Europe. Autogas is not the same as compressed natural gas, which is primarily methane and requires more pressure to keep it in a liquid state. Liquid propane is reportedly safer and “a much more convenient fuel to use,” according to Fehsenfeld.

Liquid propane has been used for many years to power lift trucks inside factories and warehouses because of its cleaner and safer exhaust, and decades ago a few auto owners began converting their engines to it. It requires a separate tank in the trunk of passenger cars, although the tank is not nearly as heavily-built as those required for compressed natural gas.

The major source of propane is natural gas wells, with the propane being separate from the methane and other gases in natural gas. About 98 percent of autogas is made in the U.S., according to Alliance.

According to Fehsenfeld, autogas conversions are most economical for fleets of cars and medium- or light-duty trucks and vans. Propane engines haven’t been perfected for heavy semi-tractors that haul freight on America’s expressways, so those are still diesel.

Fehsenfeld told the Business Journal previously that police fleets are “an interesting market” for autogas, because it has a high-octane rating providing excellent acceleration. A car engine can be modified to run on either propane or gasoline, so a car equipped with both has an extended range between refueling.

Overall cost was critical in Flint MTA’s decision to make the switch, according to General Manager and CEO Edgar Benning. The transit authority, which serves seniors, disabled persons and others in the 640 square miles around Flint, began taking a hard look at cutting costs and decided autogas was the best option among alternative fuels.

“We looked at hydrogen, natural gas and other fuels, but they all had significant barriers to entry. With autogas, we had no special storage requirements and found it relatively easy to train the drivers on how to fuel the vehicles,” said Benning.

The Flint MTA experimented with two propane-powered vans in 2011 before taking the plunge. Its 60 new vans will allow it to replace most of its current vehicles, many of which have 350,000 to 700,000 miles on them. Flint MTA also plans to purchase 34 mid-sized buses, similar to those used by school districts. It expects to have 150 to 160 propane-powered vehicles in use by spring 2014, giving it the largest propane fleet in the country.

Benning estimates the MTA will reduce fuel and maintenance expenses by $500,000 this year. As more vehicles come online, that is predicted to jump to $750,000 in 2014 and beyond.

While the numbers aren’t in for the Charlotte school year, Belinda Hoyle said the district is already saving on fuel and maintenance with the five propane-fueled buses in operation. Charlotte Public Schools’ routes cover 124 square miles of territory south of Lansing, and Hoyle eventually wants to replace all of her diesel-burning buses with propane models.

“The buses are quieter than my car,” said Hoyle, transportation supervisor for the district. “They require fewer oil changes and less replacement parts. While we are getting fewer miles to the gallon, the propane is cheap enough that it has made up the difference in the costs. We see the financial and environmental benefits to using cleaner-burning fuel.”

The Charlotte school district was aided in its conversion to autogas by a grant from the EPA.

Paul Lewis in Reed City said the school district purchased six propane-powered buses this year to carry students on six of its 15 routes, which cover more than 215 square miles. The driving force was the price, Lewis noted, explaining that while propane buses are a little more expensive up front, the lower fuel and maintenance costs make them worthwhile over the long term.

Scigliano said all three of their new fleet customers have had autogas refueling pumps installed at their fleet facilities, with the help of Crystal Flash.

Scigliano said any propane dealer could sell autogas. “There isn’t anything specifically magic about it, but we (at Crystal Flash) are educated and geared up and we know what it takes” to get the refueling infrastructure in place, as well as sources for conversion of vehicles to use autogas.

The Alliance AutoGas network of propane dealers and vehicle conversion centers is “experiencing tremendous growth,” according to Crystal Flash. Alliance spans 40 states and is also in the provinces of Ontario, Quebec and Manitoba in Canada. Alliance also provides OEM propane-using vehicles through partnerships with automotive experts at ROUSH CleanTech in Detroit.

Pete Daly is a Grand Rapids Business Journal staff reporter who covers small business, banking and finance, food service and agriculture and government. Email Pete at pdaly at grbj dot com. Follow him on Twitter @PeteDalyGR

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